17-01-2026
Introduction
This guide is for self-employed individuals in the UK seeking a mortgage with only one year’s accounts. It explains eligibility, required documents, and practical steps to improve your chances of approval. Understanding the process is crucial as lender criteria are stricter for those with limited trading history.
Key Takeaways
- In 2026, it is possible to get a UK mortgage when self employed with only 1 year’s accounts, but lender choice is more limited and criteria are tighter than for applicants with longer trading histories.
- Most high street lenders still prefer 2–3 years’ accounts, but a growing number of mainstream and specialist mortgage lenders will now consider applications with just 1 year’s accounts, provided you have finalised accounts prepared by a qualified accountant, along with strong supporting evidence such as clean credit and a reasonable deposit.
- Lenders typically base borrowing on 4–5x provable annual income, but will scrutinise affordability, credit history and deposit size more closely when there is only one year’s trading to assess.
- Fox Davidson are specialist self employed mortgage brokers who regularly arrange mortgages for clients with just one year’s accounts across the UK, helping navigate complex cases that mainstream banks might decline. Be aware that a higher interest rate may apply if you only have 1 year’s accounts, as some lenders view this as higher risk.
- This article covers eligibility, documents required, how much you can borrow, and practical steps to improve approval odds, plus an FAQ section at the end to answer common questions.
🔹 Discuss property finance with an advisor at Fox Davidson 🔹
📞 Call for immediate expert advice
📧 Email with an outline of your requirements
Can You Get a Self Employed Mortgage With Only 1 Year’s Accounts?
Yes, you can get a mortgage with only one year’s accounts—but your options will be narrower than someone with a longer trading history, and you’ll need to present a stronger overall case. Current UK lending practice, shaped by FCA affordability rules introduced after the Mortgage Market Review, requires lenders to verify income thoroughly rather than accepting self-declared figures. Many high street lenders still require two or three years’ worth of accounts, but some specialist lenders are willing to accept just one year’s worth of accounts from self-employed applicants.
There is no specific “1 year’s accounts mortgage” product that you’ll find advertised. Instead, lenders use their standard residential or buy to let products but apply more cautious underwriting criteria when assessing self employed borrowers with limited trading history. The result is that while you can access the same mortgage types as anyone else, the path to approval requires more documentation and careful preparation.
Economic volatility since 2022, including energy costs, inflation pressures and changing working patterns since COVID, has made underwriters more focused on income stability and sector risk. Some industries are viewed as more resilient than others, and lenders will want reassurance that your first year’s profit is genuinely sustainable rather than a one-off result. The main difference between a standard mortgage and a self-employed mortgage with only one year’s worth of accounts is the lender’s emphasis on assessing the stability of your income and the sufficiency of your financial documentation.
The good news is that some lenders will consider as little as 9–12 months’ trading if the case is strong. This typically means having an accountant’s projections for the coming year, clean credit, and ideally previous experience in the same sector. The worth of accounts you provide meaning the period they cover is a key factor for lender consideration. A contractor who has just set up their own limited company after ten years in PAYE employment, for example, presents a different risk profile to someone entering an entirely new field.
Set your expectations accordingly: interest rates may be slightly higher and maximum borrowing lower than for someone with three years of stable accounts, especially at high loan-to-value ratios. However, with the right preparation and broker support, securing a competitive deal is entirely achievable.
Who Can Qualify With 1 Year’s Accounts?
Different self employed structures are acceptable as long as income can be evidenced clearly and appears sustainable over time. Lenders typically require finalised accounts prepared by a qualified accountant as part of the application process. Lenders are looking for proof that your business income is genuine and likely to continue not just a single good year that might not be repeated.
Tax calculations are also reviewed as part of the qualification process to verify your net profit, salary, and dividends. Other factors, such as deposit size and credit history, are also considered by lenders.
Eligible Business Structures
Structure | Typical Lender Requirement |
|---|---|
Sole trader | SA302 and Tax Year Overview showing net profit |
Partnership | Share of partnership profit plus personal tax documents |
Limited company director (20-25%+ shareholding) | Company accounts plus personal SA302 showing salary and dividends |
Contractor/freelancer via limited company | Day rate evidence, contract documentation, company accounts |
Umbrella company worker | 6+ months’ payslips, often treated similarly to employed |
Lenders assess income differently depending on your structure. For a sole trader, they’ll typically look at your net profit from the business. For limited company directors, most lenders will consider your salary plus dividends, though some will also factor in a portion of retained profits if the company accounts show strong margins. Contractors working on defined day rates often benefit from annualised calculations based on their contract terms.
First-time buyers, home movers and remortgage applicants can all qualify with one year’s accounts—including those looking to capital-raise for purposes like business expansion, property refurbishments or debt consolidation. The key is demonstrating that your current income supports the mortgage repayments you’re applying for.
Fox Davidson regularly assist clients whose business has recently transitioned structure for example, a sole trader who incorporated as a limited company in 2025/26. These cases can be underwritten successfully when presented correctly, with clear documentation showing the continuity between the old and new structure.
Why Is It Harder With Only One Year of Accounts?
Mortgage lenders use historical income to predict future affordability. When an applicant has only 1 year’s accounts, mortgage lenders view them as higher risk due to the limited financial history available. With only one year’s accounts, there’s simply less data available, so the perceived risk is higher. An underwriter looking at three years of stable £50,000 profits has a very different picture than one looking at a single year showing £50,000 even if the numbers are identical. The amount of money a lender is willing to offer is often lower when only 1 year’s accounts are available, as lenders need more proof of income and financial stability to feel confident in approving the mortgage.
The Evolution of Lender Requirements
Historically, many lenders wanted three full years of SA302s before they’d consider a self employed mortgage application. The market has gradually shifted:
- Pre-2014: Self-certification mortgages allowed borrowers to declare income without proof (now banned under MMR regulations). Self-certification mortgages, which allowed borrowers to declare income without proof, have been banned in the UK since 2011/2014, requiring verifiable income proof.
- 2014-2020: Most lenders required minimum 2-3 years’ accounts
- 2020-present: Growing number of mainstream and specialist lenders accepting 1 year’s accounts with strong supporting evidence
The key lender concerns with one year of accounts include:
- Lack of proven track record – Has the business weathered seasonal variations, quiet periods, or economic pressures?
- Income volatility risk – Early-stage businesses often have more variable income than established ones
- Repeatability questions – Was the first-year profit influenced by one-off factors that won’t recur?
Current FCA rules require full affordability checks on every mortgage application. This means lenders must be satisfied not just that you can afford the monthly repayments now, but that you’re likely to maintain that affordability throughout the mortgage term. With limited trading history, proving this requires more supporting evidence.
This is precisely why a well-prepared application, accurate accounts certified by a registered accountant, and a specialist mortgage broker’s presentation can make a significant difference for 1-year cases. The right packaging of your application can address lender concerns before they become objections.
What Documents Do You Need With 1 Year’s Accounts?
Documentation is the key to getting a lender comfortable with a limited trading history. For most mortgage applications, finalised accounts and tax calculations are essential documents, as they provide official proof of income and business performance. The more clearly you can prove your income and demonstrate business stability, the better your chances of approval and access to competitive rates.
A Tax Calculation/SA302 form and corresponding Tax Year Overview are required by lenders to prove income for self-employed applicants. The SA302 is a summary of your income as calculated by HMRC from your self-assessment tax return, while the Tax Year Overview is a document from HMRC showing the tax you’ve paid for a specific year. These documents, along with certified accounts, business bank statements, and a solid business plan, are key requirements for self-employed mortgage applicants.
While some lenders require multiple years worth of accounts, others may accept just one year if your finalised accounts and tax calculations are comprehensive and well-prepared.
Core Income Evidence by Business Structure
For Sole Traders and Partners:
- Latest SA302 (Tax Calculation) for the completed tax year (e.g. 2023/24)
- Corresponding HMRC Tax Year Overview for the same period
- 3–6 months’ personal bank statements
- 3–6 months’ business bank statements
- Full year’s accounts if prepared by an accountant
For Limited Company Directors:
- Full year’s company accounts signed off by a qualified accountant
- Personal SA302s and Tax Year Overviews
- Management accounts up to the most recent month (particularly useful if showing growth since year-end)
- CT600 corporation tax return
- Dividend vouchers if applicable
Some lenders will request an accountant’s letter or income projection for the next 12 months. This helps support the idea that first-year profit is sustainable or growing, rather than a one-off result. A good accountant who understands mortgage underwriting can make this letter significantly more effective.
Practical Documentation Tips
- Keep personal and business bank accounts completely separate
- Avoid unarranged overdrafts in the months before application
- Ensure that declared income is consistent across accounts, tax returns and bank statements
- Check that direct debits and standing orders are paid on time
- Keep copies of all invoices and contracts readily accessible
Additional Evidence That Can Strengthen Your Case
Beyond the core requirements, several types of supporting evidence can significantly improve how lenders view your application:
Contract and invoice evidence – Contractors and freelancers can demonstrate future income stability through signed contracts. A 6–12 month contract at a defined day rate starting in late 2024 shows the lender that income will continue beyond your first year’s accounts.
Previous sector experience – If you were employed in the same sector before going self employed, this provides reassurance that your trading performance is credible. A PAYE accountant who starts their own accountancy practice, for example, brings demonstrable expertise to their new business.
Bank statement trends – Stable or rising monthly turnover on bank statements over the 12-month period is a positive sign underwriters look for. Consistent deposits from a range of clients suggest a sustainable business model rather than reliance on a single customer.
Year-to-date management figures – Where 2023/24 was your first full trading year, some lenders will consider management figures for 2024/25 if they show continued growth and are certified by your accountant.
How Much Can You Borrow With 1 Year’s Accounts?
Self employed borrowers are normally assessed on the same basic affordability principles as employed clients. Lenders determine how much you can borrow based on your income and the documentation you provide, such as your accounts and tax returns. The lender needs to confirm that your income, after tax and essential expenditure, leaves enough money to comfortably cover the mortgage repayments plus a stress-test buffer for potential rate rises.
How much deposit you can provide will directly impact the amount of money you can borrow and the range of mortgage products available to you. A larger deposit can reduce risk for the lender and may give you access to better rates or more lenders, especially when applying with only 1 year’s accounts.
Income Multiples and Borrowing Limits
Scenario | Typical Income Multiple | Notes |
|---|---|---|
Standard 1-year case | 4–4.25x annual income | Most common starting point |
Strong case (good credit, lower LTV) | 4.5–5x annual income | Requires clean credit and larger deposit |
Complex case (mixed income, recent issues) | 3.5–4x annual income | More conservative assessment |
With only 1 year’s accounts, lenders are more likely to cap at the lower end of their income multiples. They may also “shade down” projections if first-year profit looks unusually high compared to typical earnings in your sector.
How Different Structures Are Assessed
Most lenders will use the most recent year’s figure for 1-year cases rather than calculating an average (since there’s only one year available). However, they may cross-check with accountant projections and bank statements to verify the figure is realistic.
Example Comparison:
Applicant | Annual Income | Deposit | Estimated Maximum Loan |
|---|---|---|---|
Sole trader, £60,000 net profit | £60,000 | 15% (£45,000) | £255,000–£270,000 |
Limited company director, £60,000 salary/dividends | £60,000 | 25% (£100,000) | £270,000–£300,000 |
The director with the larger deposit can potentially borrow more because the lower loan-to-value ratio reduces lender risk, opening access to better interest rates and higher income multiples.
Deposit, LTV and Product Choice
While a 5–10% deposit can be possible in theory with 1 year’s accounts, in practice most cases are stronger with at least 15% or 20% deposit. Lenders typically require a higher deposit from applicants with only one year’s accounts to offset the increased risk, and this can also help avoid issues like negative equity when using recent accounts for the application. This reduces the loan-to-value ratio and significantly lowers lender risk.
Benefits of a bigger deposit:
- Wider choice of lenders willing to consider your application
- Better interest rates (potentially 0.5–1% lower)
- Higher borrowing multiples (4.5x rather than 4x, for example)
- Faster approval as lenders view lower LTV cases as lower risk
- Self-employed applicants with strong cases may be eligible for the same interest rates as employed applicants, as rates are based on risk factors and borrower profile rather than employment status alone
Where credit history is imperfect or income is more complex—such as multiple income streams or a recent business structure change—lenders may insist on a larger deposit to compensate for the perceived risk.
Fox Davidson can model different deposit levels and show you exactly how this affects your maximum loan size and monthly repayments. Sometimes finding an extra 5% deposit can unlock significantly better terms.
Dealing With Bad Credit and Previous Declines
It is still possible to secure a mortgage with 1 year’s accounts and some historic credit issues, but lender choice will narrow and pricing may be higher than for applicants with clean credit. Applicants with a bad credit history or poor credit rating may face additional challenges and may be offered a higher interest rate to offset the perceived risk.
The key is understanding what lenders are looking for and presenting your situation honestly. Improving your credit rating can increase your chances of approval and help you access better rates.
Types of Adverse Credit and Their Impact
Credit Issue | Impact on Application | Typical Lender Approach |
|---|---|---|
Missed payments (1-2, over 3 years ago) | Minor impact | Many lenders will overlook |
Multiple missed payments (recent) | Moderate impact | Specialist lenders only |
Defaults (satisfied, over 3 years old) | Moderate impact | Some mainstream, most specialist |
Defaults (recent or unsatisfied) | Significant impact | Specialist lenders, higher rates |
CCJs (satisfied, over 2 years old) | Moderate-significant | Specialist lenders |
CCJs (recent or unsatisfied) | Major impact | Limited specialist options |
Debt management plans | Significant impact | Specialist lenders only |
Bankruptcy/IVA (discharged 3+ years) | Major impact | Very limited options |
Issues older than 3–6 years that are now satisfied are generally easier to place than recent or unsatisfied problems that occurred in 2022–2024. Lenders look at both recency and severity when assessing credit history.
If You’ve Already Been Declined
A decline from one bank doesn’t mean every lender will say no. Each lender has its own criteria, and what fails at one may succeed at another. However, it’s important not to make multiple applications in quick succession, as each credit search can temporarily lower your credit score.
Before reapplying elsewhere, it’s worth:
- Obtaining a copy of your credit report from all three UK agencies
- Understanding exactly why you were declined (ask the lender for feedback)
- Addressing any issues that can be fixed (correcting errors, paying off small debts)
- Allowing time for your credit file to improve if recent issues are the problem
A whole-of-market specialist mortgage broker like Fox Davidson can steer applications towards lenders more comfortable with both limited accounts and moderate adverse credit, avoiding wasted applications and unnecessary credit searches.
How to Improve Your Chances Before Applying
Preparation 3–6 months before your mortgage application can significantly improve both acceptance odds and the quality of offers you receive. This investment of time pays dividends when you’re ready to apply. Make sure to pay all your bills and financial commitments, including rent or any existing mortgage installments, on time to maintain a strong credit profile.
Credit File Preparation
Check all three UK credit reference agencies—Experian, Equifax and TransUnion—for:
- Errors in personal details (wrong address, misspelled name)
- Old addresses that need updating
- Unused credit accounts that could be closed
- Any defaults or missed payments you weren’t aware of
- Electoral roll registration (essential for identity verification)
Regularly check your credit report in the months before application, addressing any issues as early as possible.
Practical Steps to Strengthen Your Position
- Reduce unsecured debt 3-6 months before applying to improve affordability calculation
- Avoid new finance applications 6 months before applying to prevent credit score drops
- Ensure all bills are paid on time to maintain a good credit score
- Increase deposit savings on an ongoing basis to unlock better rates and multiples
- Keep bank statements clean 3-6 months before applying to show a stable financial situation
Working With Your Accountant
- Work with a qualified accountant who understands mortgage underwriting and the balance between minimising tax and maximising borrowing capacity.
- Discuss your borrowing goals with your accountant before finalising your accounts, as aggressive expense claims can reduce your declared income and limit your mortgage options.
- Speak to Fox Davidson early, even before your first year’s accounts are finalised, to structure your income and timing for maximum borrowing potential.
Choosing the Right Lender and Product
- Some high street lenders are open to 1-year self employed cases, but many are only accessible via a broker who understands their detailed criteria.
- Mainstream lenders generally offer lower interest rates and arrangement fees but are less flexible on criteria.
- Specialist lenders are more accommodating of nuanced income patterns and complex cases but may charge higher rates or fees.
- Product selection matters: consider a 2-year fixed rate for flexibility if your income is growing, or a 5-year fix for longer-term payment certainty.
- Fox Davidson compare mainstream and specialist lenders side-by-side, factoring in total cost over the fixed term rather than just the headline rate.
How Fox Davidson Help Self Employed Clients With 1 Year’s Accounts
Fox Davidson are an award-winning, Bristol-based mortgage and property finance broker working with clients across England and Wales. Specialising in complex cases, we understand that self employed individuals often don’t fit the neat boxes that mainstream lenders prefer.
Our Typical Process
- Initial free consultation – No-obligation discussion about your situation, income structure and goals
- Document review – Assessment of your accounts, bank statements and any supporting evidence
- Credit check – With your permission, we review your credit report to identify any potential issues
- Lender research – Matching your profile against our panel of mainstream and specialist lenders
- Tailored recommendations – Presenting options that genuinely suit your individual circumstances
Experience With Complex Cases
We regularly help clients with situations that might be declined elsewhere:
- Newly incorporated limited companies with only one year’s trading
- Rapid business growth where current figures far exceed first-year results
- Multiple income streams combining self employment with rental income or part-time PAYE
- Portfolio landlords looking to expand using 1 year’s self employed income
- Clients combining residential and commercial borrowing requirements
Fox Davidson can also advise on alternative structures where appropriate. This includes limited company buy to let, HMO and MUFB finance, and bridging loans for clients who need to purchase a property before full accounts are available—refinancing onto a standard mortgage once the trading history requirement is met.
Contact Fox Davidson to discuss your specific circumstances. Many successful cases started with “only one year’s accounts and a lot of questions.” A free consultation costs nothing and could save you considerable time and frustration.
FAQs: Self Employed Mortgages With 1 Year’s Accounts
Q1: Can I get a mortgage if I have been self employed for less than 12 months?
A few lenders will consider around 9–12 months’ trading if income is clearly evidenced through other means. This typically requires long-term contracts already in place, strong previous PAYE employment in the same sector, a good deposit (usually 20%+ minimum), and clean credit history. Options are very limited before a full year of accounts is available, but not impossible in the right circumstances. Speaking to a specialist mortgage broker early can help you understand what’s achievable and plan accordingly.
Q2: Do lenders look at previous PAYE income if I have just gone self employed?
Underwriters sometimes take comfort from a strong PAYE history in the same line of work, even though they will still base the primary affordability calculation on your first year of self employed income. For example, a solicitor who leaves a law firm to start their own practice brings demonstrable expertise that reduces perceived risk. Some lenders may be more flexible on criteria or income multiples when they can see relevant prior experience, though this varies by lender and individual circumstances.
Q3: Can I get a Help to Buy or shared ownership mortgage with 1 year’s accounts?
The original Help to Buy: Equity Loan scheme has closed to new applicants in England. However, some regional schemes and shared ownership options can be accessible to self employed borrowers with 1 year’s accounts, subject to specific housing association and lender criteria. Shared ownership can be particularly helpful for first-time buyers as you only need a mortgage for the share you’re purchasing (typically 25-75% of the property value). Each scheme has its own rules, so mortgage advice tailored to your situation is essential.
Q4: Is a joint application easier if only one of us is self employed with 1 year’s accounts?
Having one applicant in stable PAYE employment can strengthen the overall case significantly. Lenders may be more open to the application if the employed income comfortably covers a good proportion of the mortgage, treating the self employed income as supplementary rather than essential. This can unlock access to more mainstream lenders and better interest rates. The employed applicant’s income evidence (payslips, P60) is also simpler to verify, which speeds up the application process.
Q5: How soon after my first year-end should I speak to a broker?
Contact a broker like Fox Davidson as soon as draft accounts are ready, ideally before submitting your tax return. This allows time to spot any issues early—such as income declared lower than expected due to tax planning—and structure the timing of your application around lender requirements. Some lenders have specific cut-off dates for accepting previous tax year figures, so early engagement ensures you don’t miss the optimal window for your application.
Fox Davidson are a specialist UK mortgage broker covering all areas of property finance. We work with international and UK resident clients to secure funding on residential & commercial property in the UK. We can work by phone, email and video call. We have London & South West offices at which we can meet clients.
